After the Long awaited, the Government Set the Competitive Industrial Gas Price

By : Ridwan And Aldo Bella Putra | Wednesday, October 11 2017 - 21:00 IWST

Sektor Migas (Foto Ist)
Sektor Migas (Foto Ist) - Jakarta - The Government through the Ministry of Energy and Mineral Resources (ESDM) will maintain the sustainability of growth and industrial competitiveness by realizing affordable natural gas prices. This is following the direction of the President of the Republic of Indonesia related to the determination of gas price of US $ 6 per MMBTU.

In the Presidential Regulation (Perpres) No. 40 of 2016, the Government has determined seven industries that will get the gas price facility, namely fertilizer, petrochemical, olechemical, steel, ceramic, glass, and rubber gloves.

Following up the regulation, the ESDM Minister issued its derivative beleid namely Ministerial Regulation (Permen) ESDM No 40 year 2016 detailing certain industries since it was enacted on 26 November 2016.

"The regulation provides fresh air for domestic industries to compete," said Head of Communication, Public Information and Cooperation Services (KLIK) Ministry of ESDM, Dadan Kusdiana in Jakarta (11/10/2017).

Until now there have been 3 types of industries and 9 companies that have experienced a change or decrease in gas prices. The three industries are fertilizer, petrochemical and steel, and 9 companies are PT Kaltim Parna Industri, PT Kaltim Methanol Industries, PT Pupuk Kalimantan Timur, PT Pupuk Kujang Cikampek, PT Pupuk Sriwidjaja Palembang, PT Pupuk Iskandar Muda, PT Petrokimia Gresik, and PT Krakatau Steel. The decline in the price of gas in question, does not affect the state revenue.

"The pricing of gas by the ESDM Minister considers a number of things, namely the economy of the field, the price of natural gas in the country and internationally, the purchasing power of domestic natural gas consumers and the added value of natural gas utilization in the country," said Dadan.

Especially for the region of Medan and its surroundings, the Minister of Energy and Mineral Resources Ignasius Jonan has also cut the price of upstream gas, tariffs of gas through pipelines, and the cost of natural gas distribution specified in the Decree of Minister of Energy and Mineral Resources Number 434 / K / 12 / MEM / 2017 which signed February 13 2017.

In the Permen, industries in North Sumatra, PT Pertamina or affiliates, and PT PGN are buyers and / or shippers who feel the benefits of gas price changes in the policy.

For example, for gas of 4.7 BBTUD from PHE NSO sold to PT Pertamina (Persero) with an initial price of US $ 7.85 per MMBTU, to US $ 6.95 per MMBTU plus 1 percent ICP. Meanwhile, the decline in the cost of natural gas distribution is from PGN's pipeline to industrial consumers in North Sumatra, from US $ 1.35 per cubic meter to US $ 0.9 per cubic meter.

In line with the above policy, the Government has also issued a policy to increase the utilization of natural gas for the country. This step is taken to ensure the efficiency and effectiveness of the availability of natural gas as fuel, raw materials or other purposes for domestic needs.

Utilization of natural gas for domestic since 2013 is greater than exports. In fact, the achievement of the first semester of 2017 shows domestic gas allocation of 60.4 percent. This figure exceeds the mid-semester target. Whereas until the end of 2016, the allocation of domestic gas only recorded 59 percent, 2015 by 55 percent and 2014 only 53 percent.

The policy of allocation and utilization of natural gas itself refers to the Regulation of the Minister of Energy and Mineral Resources number 06 of 2016 on Provisions and Procedures for the Determination of Allocation and Utilization of Natural Gas and Natural Gas Price. "The trend of increasing domestic gas utilization compared to exports continues to be done" added Dadan.

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